Inventory management overview
What does inventory management software do?
Inventory management, or stock control, is the process by which a company keeps track of its stuff. For a small business, keeping track of items with Excel or Quickbooks or even pencil and paper may be sufficient, but as the business grows so does the complexity of the task. Eventually a company adopts an inventory management system to bring organization and consistency to its records.
Many companies employ barcode scanners to count items quickly and reduce the chance of human error in shipments and stock takes. Inventory management software like Finale Inventory includes intregrated mobile barcode solution that works with off-the-shelf scanners. If you are starting to setup a mobile barcode system for your company, look at some of the barcode example use cases to see how companies similar to yours deal with labels and manufacturer applied barcodes for product IDs, lot IDs, and serial numbers.
For wholesalers, distributors, and retailers, the "stuff" that the business keeps track of is products bought from suppliers and sold to customers. For manufacturers, stuff includes the parts or ingredients that go into making the products, in addition to the products themselves. For restaurants, stuff includes the ingredients and supplies that go into the food served. For service businesses that rent items to customers or for businesses that need to keep track of their own equipment, stuff includes the assets that remain in the possession of the business but change location (asset tracking software). There are many different kinds of stuff used by different kinds of businesses, but the basic concepts of inventory management are remarkably similar across all of them.
The top level concepts involved are suppliers, purchases, stock, transfers, work orders, sales, and customers. Reading left-to-right, you can follow the path from which products or parts are purchased from suppliers into company stock, assembled, and sold through sales to customers. The block diagram varies slightly for different types of businesses: wholesale and distribution, manufacturing, and retail and restaurants. However the inventory control system concepts are the same.
At the next level of detail, the concepts of inventory management address situations that occur in the real world. Purchases and sales, for example, may be be shipped across multiple shipments, or a shipment may not contain what is specified in the sales or purchase order. Introducing the concept of shipments as distinct from purchases and sales accommodates these situations.
Inventory management systems in small and medium sized businesses are often separate from the company's accounting system. If you use Quickbooks or Excel for your accounting, then the purchases and sales are the interface points between inventory and accounting. Introducing quotes and invoices to the sales completes the main concepts for order management software, and lays out the files that can be imported and exported between your inventory and accounting system.
In the simplest of scenarios, stock levels are merely quantities of items, but in practice stock levels are sometimes a bit more involved. Stock is stored in different warehouses, and within those warehouses in bays, or aisles or bins. Keeping track of stock levels entails keeping track of quantities per location. Items may be stored individually ("eaches") or packed into cases or handling units. Many businesses keep track of not just quantities of stock with inventory tracking software, but also the packing. Some types of products have expiry dates, or serial numbers, or other properties identified by lot or batch. Thus stock may not just be quantities of a particular product, but of a particular lot.
Deeper levels of detail address such topics of price discounts, tax authorities, multiple addresses, and so forth. You can imagine, though, how each level of detail fits into the framework above it. With these levels of detail in hand, you can navigate the subjects of inventory management and focus on the details that are most pertinent to your business.
Examples from Finale Inventory
Here are a few example videos of using Finale Inventory to create a product or a sales order.
Overview (simple example)
Importing a product list from Excel
Creating large sales orders (quickly)